Canadian-based Abebooks, an online marketplace with 72 million new and out-of-print titles listed from more than 13,000 independent booksellers, began to look at expansion in Europe in 2001.

But President and CEO Hannes Blum quickly realized that targeting Europe as a unified whole was a mistake. "To look at it as 'European expansion' just doesn't work," he says. "Every market has its own rules and peculiarities."

Abebooks now has four Web sites for shoppers outside North America, including one for Germany, France, the UK and a Spanish/Portuguese site (links below).

We interviewed Blum, VP Marketing Lisa Stevens, and European-division search marketer Marcus Polke on the steps the team took to successfully expand into those markets and some of the lessons they've learned along the way.

Step #1. Acquire local market leaders

"It takes a long time to build up demand" in different markets, both on the side of the resellers and book buyers, says Blum.

With that in mind, he chose to acquire existing companies rather than to start from scratch. "The organically grown businesses are better, so I think acquisition is a better way to grow in Europe."

In 2001, Abebooks acquired the market leader in Germany, France and the UK, JustBooks. Last October, they acquired Spain's market leader, Iberlibro. Each site shares the same top-level domain (Abebooks) and the same branding elements, except for Iberlibro. "We're still transitioning, introducing our branding slowly," Blum explains.

Stevens adds, "If a customer is flying on a plane from New York to London and sees an ad in The New Yorker, but goes to the .de (German) site, the signature red stripe will help them know they're in the right place."

Step #2. Maintain local offices

Most companies start with an office in London and expand into Europe from there. "That doesn't work," Blum says. "I think you can't get around hiring local people who understand the markets very well."

Each country's customs, shopping habits and likes and dislikes differ more than most people imagine, so "we have one or two people for each site to localize it," he says.

Step #3. Accommodate different payment preferences

Payment habits are different in each of the countries in which Abebooks does business. While credit cards are used commonly on the Internet in the UK, "You won't get very far [that way] in France and Germany," says Blum. "There's a huge resistance to using credit cards."

That's not because those countries are behind in technology -- "and banking is very efficient," he notes -- but simply because consumer discomfort still hasn't been overcome.

So Abebooks fulfills books along with an invoice. (Practically unheard of in North America.) The buyer then usually does an electronic funds transfer into the account of the seller. "In our case, there's a lot of trust," says Blum. "Our booksellers have very few problems with buyers in terms of payment."

Incidents do happen, of course, and for some higher-end merchants such as antiquarian booksellers, Abebooks uses trust services where the money goes into an escrow account.

Not all partner sites are the same. Blum notes eBay requires buyers do bank transfers up front, or pay cash on delivery. PayPal hasn't penetrated far into Europe, and there's no other dominant player in that area as of yet, Blum adds.

And on Amazon in Germany, buyers can have Amazon withdraw the money directly out of their bank accounts.

Step #4. Price in local currencies

All books in the database, including those offered from American sellers, are priced in the currency appropriate to the market (euros or pounds). "It almost goes without saying that you'd do this, but not all ecommerce [companies] do because technically, it's not completely easy," says Blum. That's because, in part, you have to account for the volatility of currencies.

"When [a visitor does] a search query, we're calculating the different prices in different currencies, based on the daily rates. It's a science in itself."

Step #5. Make internal site search work better for local markets

Shipping books from, say, the US to Germany is expensive. So the search function on each of the sites pulls local selections first.

Those selections are sorted based on price, lower-priced items first. Until about a year ago, the sites' search functions sorted selections with new books first. "We tracked closely to see what happened in terms of buyer behavior. There were definitely some buyers who liked to have the function of newest books first, but the majority wanted lowest-price first."

Surprisingly, says Blum, the new sorting didn't have an impact on average sales price. "We expected that the volume [of sales] would go up, and average price would go down slowly, but it didn't happen."

Buyers still have the opportunity to select how they want results sorted, and Blum has been tracking behavior, "but honestly, there's no clear pattern on how people search our database in terms of completely different behavior between countries," he says.

"What's most important is that we're fast. With a database of 72 million books, you don't want to wait a few seconds for results. If you compare what we have now with two years ago -- then it was six seconds, average. Now we're below 300 milliseconds average. That had a huge impact on our conversion rates."

Step #6. Match promotional offers to local preferences

Given that their country is in a recession, Germans are currently more price sensitive, Blum says.

So, in Germany, he's more likely to see success when content focuses on discounts and bargains. Newsletters and other marketing materials for the German market focus in that direction. "Whereas in France and the UK, we have more high-end buyers," he says. The marketing messages, then, focuses on the product and the value of the product.

Step #7. Search marketing varies by country

Abebooks' search marketer Marcus Polke notes, "SEM is one of the main pillars of our marketing efforts, but all markets are different in terms of maturity."

Key: The intersection of affiliate and search marketing. If you have a large number of sophisticated affiliates in one country, and you allow them to conduct search campaigns, then your in-house team doesn't have to worry as much about carrying the search load entirely by themselves there. Which is why Abebooks winds up investing more in SEM for Spain and France and less in Germany and the UK, which have very well-developed affiliate bases.

Just like North America, European paid search ads are pricier in markets with more competition. So cost per click on the same keyword might be 50 cents in UK, one dollar in Germany. For example, the term "Old Books" is pricier to buy in Germany than in the UK.

All local markets (Germany, Spain, France, UK) launch search marketing with the same list of translated keywords. (Never bid on English-language words in non-English language countries.) Then the team tested and optimized pay-per-click campaigns separately for each local market.

SEO has lowest conversion rates but brings loads of visitors. PPC campaigns have similar conversion rates across all four countries. No country is drastically better or worse than others. However as you'd expect, existing customers generally convert about twice as well as new visitors.

Useful links related to this article

Main site http://www.Abebooks.com

UK Site http://www.Abebooks.co.uk

German site http://www.Abebooks.de

French site http://www.Abebooks.fr Spanish & Portuguese site http://www.Iberlibro.com

GFEH - the Hamburg Germany paid search ad agency that handles Abebooks' campaigns for four countries: http://gfeh.de

Related MarketingSherpa Case Study: Sharper Image Tests European Eretail Launch http://www.marketingsherpa.com/barrier.cfm?currentID=1828

Note: Abebooks is a member of Shop.org, a forum for retailing online executives to share information, lessons-learned, new perspectives, insights and intelligence. More info at http://www.shop.org